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Chipmaker AMD spends $5.4 bil. for ATI

Mon, 07/24/2006 - 7:10am
CED staff

AMD will spend $4.2 billion in cash and 57 million shares of its common stock (NYSE: AMD) to purchase fellow chipmaker ATI, the companies announced this morning. The move is intended to strengthen AMD against rival Intel Corp., by adding ATI's expertise in graphics, chipsets, and consumer electronics.

The combined company will employ approximately 15,000 employees, and will collect roughly $7.3 billion in aggregate sales during the last four quarters, officials said. Headquartered in Sunnyvale, Calif., the company will also maintain sales, design and manufacturing centers worldwide and in Silicon Valley, Austin, Texas and Markham, Ontario.

"Joining with AMD will enable us to innovate aggressively on the PC platform, and continue to invest significantly in our consumer business to stay in front of our markets," said Dave Orton, President and CEO of ATI, in a statement.

Microsoft Corp. apparently likes the move, too. In the announcement materials, Jim Allchin, co-president of the company's Platforms & Services division, praised the deal for the graphics oomph it lends to Windows Vista. "We're excited by the potential of what AMD and ATI can deliver together to enhance the Windows Vista experience for our customers even further," he said.

AMD's shares were down 4.22% to $17.49 by mid-day on the East coast.

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